Netflix Focusing On Ownership Rather Than Licensing Of Hit Shows

Netflix CEO Reed Hastings is thinking of the future, and similarly to HBO, has plans to own most of the 20 original series that will be introduced on the streaming platform by next year. Hastings confirmed this by claiming that Netflix has long played a creative role in the shows, and now it is “taking on ownership and production.”

How will it benefit Netflix?

Such a step marks a major advancement for the company, which has borrowed rights for shows from other studios, for instance, Sony Pictures, in the past. Even for the House of Cards, which users associate with Netflix, producer Media Rights Capital owns the rights.

Hastings did not reflect much on the shows that the company is planning to own, but one of the original titles that Netflix has acquired so far is Flaked, says a report from Bloomberg citing an anonymous source.

Actually owning TV shows will considerably benefit the on-demand streaming service. Along with providing the company with an opportunity to offer shows that others might not possess, ownership will eradicate the problem of conflicting streaming rights in different geographical regions. Moreover, it will enable the company to increase its revenue by marketing DVDs of the TV shows or by selling their rights to other services. In addition, the program will guarantee an availability of new material, in case the TV networks choose to restrict selling streaming rights to Netflix in the future, notes the report.

Question’s on Netflix’s ability?

However, some of the analysts are doubting Netflix’s potential to effectively compete with the already established content producers such as HBO, FX, AMC, etc. One analyst, Michael Pachter of Wedbush Securities, claims that owning a piece of content will increase the company’s costs more than what it pays for licensing the shows. Pachter also asserted that Netflix has never made a complete TV show, and is susceptible to making wrong decisions.

Nevertheless, the CEO is optimistic about the company’s growth. His stance has long been that internet is substituting for television, and in the coming two decades, the industry will see a transition from linear to Internet TV. In an effort to serve this market, some say that Netflix might make 40 new shows per year by 2018.